From: Lydia Wegman/RTP/USEPA/US

To: "Frey, Nathan J." <Nathan_J._Frey@omb.eop.gov>, "Lee, Amanda I." 

<Amanda_I._Lee@omb.eop.gov>

Cc: Joseph-J Dougherty/DC/USEPA/US@EPA, Darryl Weatherhead/RTP/USEPA/US@EPA, Lillian 

Bradley/RTP/USEPA/US@EPA, Bryan Hubbell/RTP/USEPA/US@EPA

Date: 12/13/2012 04:25 PM

Subject: Additional information on the final RIA analysis

Nathan and Amanda,

Please find attached the additional information on the RIA which was requested during our meeting on 

the afternoon of December 11.

We plan to include sections 1 of this additional information (Analyses Conducted to Illustrate Attainment) 

and 2 (Analytical Differences between Proposal and Final) in the Executive Summary. We believe that 

section 3 (Examples of the Analytical Differences between Proposal RIA and Final RIA) is too detailed for 

discussion in the ES.
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Please let us know if you have any additional questions.

In response to the December 11, 2012 discussion on the PM2.5 National Ambient Air Quality Standards (NAAQS) 

final Regulatory Impact Analysis (RIA) with OMB, we’re providing additional detail and clarification on (i) some of 

the analytical methods applied in the final RIA and (ii) differences between the PM2.5 NAAQS proposal RIA and the 

final RIA. The information is divided into the following sections (1) Section 1 outlines and provides details on the 

analyses conducted to illustrate attainment with the revised standard of 12 μg/m3; and (2) Section 2 walks through 

examples of analyses conducted from the proposal and final RIAs.

1. Analyses Conducted to Illustrate Attainment

The flowchart below outlines the analytical steps taken to illustrate attainment with the revised standard of 12

μg/m3, and the following discussion, by primary flowchart section, describes each of the steps taken.

1. Establishing the Analytical Baseline (Flowchart Section 1) -- This section of the flowchart reflects 

the analytical steps taken to account for Federal and state rules and programs currently underway, as well 

as to reflect attainment of the current annual and daily standards of 15/35 μg/m3for the purpose of 

estimating the incremental costs and benefits of attaining the revised annual standard Detailed 

discussions of the elements of this section of the flowchart are in Chapters 1 and 3 of the final RIA.
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a. Adjusted 2020 Base Case with “On the Books” Federal and State Rules and Programs -- The 

adjusted 2020 base case includes reductions expected to occur between 2007 and 2020 

from existing (i.e., “on-the-books”) federal and state control programs. This projection 

reflects air quality modeling of 2020 that accounts for major federal and state programs 

along with adjustments to these national-level modeling results to account for PM2.5

reductions expected, largely in the western US, from the implementation of episodic burn 

ban programs in certain counties and to remove the effects of atypical events such as 

wildfires and fireworks displays. (See Map below for illustration.)

Annual NAAQS Exceedances*in 

“Adjusted 2020 Base Case” Scenario

*

24-hr PM2.5 NAAQS Exceedances as Follows:

• San Joaquin Valley (6 counties); South Coast (2 counties); Imperial, CA; Allegheny, PA; Salt Lake, UT; Lake, 

OR; and Sacramento, CA
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b. Analytical Baseline with Attainment of 15/35 -- The analytical baseline includes reductions 

from additional controls that the EPA estimates are needed to attain the current standards

(15/35μg/m3) for the purpose of estimating the incremental costs and benefits of attaining 

the revised annual standard of 12 μg/m3. Determining the level of emissions reductions 

needed to meet both the current annual and daily standards is done through adjusting a 

county’s projected design value (DV) concentration using the geographic area and pollutant 

specific air quality ratios (as described in Chapter 3 of the final RIA). In addition, for each 

area, it is necessary to determine which of the standards will be “controlling”, i.e., which 

standard will require the most reductions to reach attainment of current standard. This is 

important for establishing the analytical baseline because when the daily standard is 

controlling (as is the case in much of California), the emissions reductions required to meet 

the daily standard will result in reductions in the annual design value to below the annual 

standard of 15 μg/m3. As a result, the annual PM2.5 increment needed to attain alternative 

standards for each county will not be relative to an annual design value of 15 μg/m3, rather, 

the increment will vary by county based on the annual design value in that county that 

resulted from applying emissions controls to meet the 35 μg/m3daily standard. As shown in 

the map below, for counties labeled as exceeding the 12 μg/m3annual standard, the 

baseline design values can be any value between 12 and 15 μg/m3. Similarly, exceedances of 

the 11 μg/m3and 13 μg/m3standards can be anywhere between 11 or 13 and 15 μg/m3. 

The analytical baseline reflects attainment of 15/35 μg/m3by2020. We also modified the

analytical baseline for counties in the South Coast Air Quality Management District and the 

San Joaquin Valley Air Pollution Control District to reflect reductions in mobile NOx 

emissions that these areas are expected to achieve between 2020 and 2025 due to fleet 

turnover. These reductions in NOx emissions are not attributable to attainment of the 

current or revised PM standards, but reflect the impacts of other ”on-the-books” mobile 

programs so that these reductions are not included as either an incremental cost nor benefit 

to these area’s attaining the revised annual standard.

Annual NAAQS Exceedances in 

“Analytical Baseline” Scenario

• 13 Level: 2 Counties (Tulare, CA and Riverside, CA)
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• 12 Level: 7 Counties (All in CA)

• 11 Level: 23 Counties

2. Control Strategies (Flowchart Section 2) – This section of the flowchart reflects analytical steps 

taken to analyze controls and emissions reductions needed beyond the current standard (15/35 μg/m3) 

and other existing major rules to achieve the revised standard (12 μg/m3). We apply control options that 

might be available to states for application by 2020. Detailed discussion of the elements of this section of 

the flowchart is in Chapter 4 of the final RIA.

a. Select Controls by Emissions Sector and Pollutant -- Non-EGU point and nonpoint control 

measures were applied for the revised and alternative standards’ control strategies. These 

controls were identified using the U.S. EPA’s Control Strategy Tool. Additional control 

measures were not applied to EGUs because of the extensive nature of controls resulting 

from the inclusion of MATS.

b. Adjust 2020 Control Scenario to Meet Alternate Standards -- After identifying the known 

controls in the control scenario that were needed to meet the analytical baseline, additional 

known controls needed to meet the revised and alternative standards were identified. The 

EPA used air quality modeling results to determine whether the control scenario was 

sufficient to meet the revised and alternative standards for each geographic area. Where the 

control scenario modeling resulted in design value reductions below the level needed for the 

revised or alternative standards for specific geographic areas, county-specific ratios of air 

quality response to emission reductions were used to determine the subset of controls that 

were needed to attain the standard. Where it was determined that the control scenario was 

not sufficient in attaining the standard, these same response factors were used to calculate 

the amount of additional emission reductions beyond known controls needed to meet the 

standard. For the revised and alternative control strategy analysis, known controls for two 

sectors were used: non-EGU point and area sources. Onroad mobile source controls were 

not used in the revised and alternative standards analysis because they were applied 

previously in the analytical baseline analysis where they were deemed to be most cost 

effective.

3. Analysis of Costs (Flowchart Section 3) – This section of the flowchart reflects analytical steps taken to 

estimate the costs of both known and unknown controls. Detailed discussion of the elements of this 

section of the flowchart is in Chapter 7 of the final RIA.

a. Estimate Known Controls Engineering Costs, Estimate Extrapolated Costs -- We provide 

engineering cost estimates for the control strategies identified in Chapter 4 that include control 

technologies on non-EGU point sources and area sources. Engineering costs generally refer to the 

capital equipment expense, the site preparation costs for the application, and annual operating 

and maintenance costs. For this analysis, we included known controls for all of the geographic 

areas likely to exceed the revised and/or alternative standards. We also provide estimates for the 

engineering costs of the additional emissions reductions that are needed beyond the application 

of known controls to reach full attainment of the alternative standards analyzed; the cost 

estimates derived from this approach are referred to as “extrapolated” costs. By definition, no 

cost data currently exists for the additional emissions reductions needed beyond known controls. 

We employ two methodologies for estimating the costs of unidentified future controls, and both 

approaches assume that innovative strategies and new control options make possible the 

emissions reductions needed for attainment by 2020.
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4. Full Attainment (Flowchart Section 4) – This section of the flowchart reflects analytical steps taken to 

estimate the costs of attainment, the benefits of attainment and the net benefits for the revised standard 

of 12 μg/m3. Detailed discussions of the elements of this section of the flowchart are in Chapter 5, 

Chapter 7, and Chapter 8 of the final RIA.

a. Calculate Full Attainment Costs – In Chapter 7 we present a summary of the total national costs 

of attaining the revised annual standard of 12 μg/m3 and the alternative annual standards of 13 

μg/m3and 11 μg/m3 in 2020. This summary includes the known and extrapolated costs. The total 

cost estimates are $53 million (2010$) and $350 million (2010$) for the revised annual standard 

of 12 μg/m3; $11 million and $100 million for the alternative annual standard of 13 μg/m3; and 

$320 million and $1,700 million for the alternative annual standard of 11 μg/m3.

b. Calculate Full Attainment Benefits – Chapter 5 presents the estimated human health benefits for 

the revised NAAQS. We quantify the health-related benefits of the fine particulate matter 

(PM2.5)-related air quality improvements resulting from the illustrative emissions control 

scenarios that reduce emissions of directly emitted particles and precursor pollutants including 

SO2 and NOx to reach alternative PM2.5 NAAQS levels in 2020. These benefits are relative to an 

analytical baseline reflecting nationwide attainment of the current primary PM2.5 standards (i.e., 

annual standard of 15 μg/m3and 24-hour standard of 35 μg/m3) that includes promulgated 

national regulations and illustrative emissions controls to simulate attainment with 15/35 as well 

as a NOx emission adjustment to reflect expected reductions in mobile NOx emissions between 

2020 and 2025. 
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The estimated benefits for the revised and alternative standards are in addition to the 

substantial benefits estimated for several recent implementation rules. Rules such as the 

Mercury and Air Toxics Standard (MATS) and other emission reductions will have substantially 

reduced ambient PM2.5 concentrations by 2020 in the East, such that no additional controls 

would be needed in the East for the revised annual standard of 12 μg/m3. Thus, all of the 

estimated benefits occur in California because this is the only state that needs additional air 

quality improvement beyond the analytical baseline after accounting for air quality 

improvements from recent rules.

c. Net Benefits -- Chapter 8 compares estimates of the benefits with costs and summarizes the net 

benefits of revised annual standard of 12 μg/m3 and the alternative annual standards of 13 

μg/m3 and 11 μg/m3relative to the analytical baseline that includes recently promulgated 

national regulations and additional emissions reductions needed to attain the existing 15/35 

μg/m3standards, as well as adjustments to NOx emissions in the San Joaquin and South Coast 

areas.

2. Analytical Differences between Proposal and Final

Below is a list summarizing some of the analytical changes in the analyses between the proposal RIA and the final 

RIA. In addition, the table and examples below step through the major steps of the air quality analyses conducted 

in the proposal RIA and in the final RIA. Between the proposal RIA and the final RIA, we developed the control 

strategies based on an improved modeling platform and updated the approach in designing the control strategies. 

The improved modeling platform updated the current and projected air quality levels for each area across the 

nation and the updated approach allowed for more effective emissions reductions for each area in both attaining 

the current annual and daily standards for our analytical baseline and in attaining the revised annual standard. For 

example, in the proposal RIA we controlled precursor emissions of NOx and SO2 over a broader region and these 

emissions reductions were not as effective in reducing design value for each area as the direct PM2.5 emissions 

reductions targeted in the final RIA. These analytical improvements resulted in different estimates of costs and 

benefits between the proposal RIA and the final RIA which we have more confidence in reflecting the approaches 

that states will pursue to attain the current and revised standards.

a. New modeling platform -- In the new modeling platform we included key updates to the current ambient 

data that show improved air quality between the proposal and final, although daily design values (DVs) for 

some areas in California increased due largely to wildfires in 2008. To address the increases in these areas 

we adjusted the ambient data for these atypical events.

b. Future air quality with “on-the-books” controls – We also project PM2.5 air quality levels between 2007 

and the 2020 base case which were generally lower in the final RIA compared to the proposal RIA largely 

because the starting values for the ambient data were lower (i.e., final RIA air quality projections showed 

more improvements than proposal RIA). For areas in the eastern U.S., these lower starting values put 

their projected annual DVs below 12 μg/m3for the final RIA when they were slightly above 12 μg/m3for 

the proposal RIA. For an example, see the discussion on Wayne County, Michigan below.

c. Analytical baseline with attainment of 15/35 – For the final RIA, EPA’s approach to attaining the existing 

standards of 15/35 μg/m3 was improved with "air quality adjustment ratios" that were based on more 

focused sensitivity model runs for (i) specific areas like California counties; (ii) influential sources like 

residential wood combustion; and (iii) specific PM emission species like directly emitted PM2.5. In the

proposal RIA, we conducted the analysis using more general air quality ratios that reflected multiple 

sources such as point and area and precursor PM emissions like NOx and SO2. As a result, in the final RIA, 

the daily standard of 35 μg/m3 was attained more effectively and had less impact on annual DVs because 

of episodic, direct PM2.5 reductions, while in the proposal RIA, the daily standard was attained less 

effectively because we pursued year-around NOx and SO2 reductions that necessitated more emissions 
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reductions and had more impact on the annual DVs. For an example, see the discussion on Riverside 

County, California below.

d. Incremental air quality changes – In the final RIA, the use of improved air quality adjustment ratios

resulted in more incremental air quality improvement needed to attain the annual standard of 12 μg/m3

in California. Thus, these larger incremental air quality improvements needed to attain the revised 

standard resulted in higher estimated health benefits in the final rule compared to the proposal RIA. As 

described above, this is because the daily standard of 35 μg/m3 was attained more effectively and had less 

impact on annual DVs across the counties in California. In addition, the focus on direct PM2.5 emissions 

reductions allowed for more effective controls to attain the revised standard with fewer PM2.5 emissions 

reductions thereby resulting in similar fixed costs estimates.

1

3. Examples of the Analytical Differences between Proposal RIA and Final RIA

Wayne County, Michigan

2020 Base Case with “On-the-Books” Controls

In the proposal RIA, Wayne County, Michigan exceeded the annual standard of 12 μg/m3, but not the 24-hour 

standard. In the final RIA, Wayne County did not exceed either the annual of 12 μg/m3or 24-hour standard. 

As such, for the annual standard of 12 μg/m

3

, Wayne County was relevant for the cost-benefit analysis in the 

proposal RIA but not relevant for analysis in the final RIA. See the table below for the annual and 24-hour DVs 

for the 2020 base case for the proposal and final RIA analyses.

2020 Base Case

Proposal (Base case)

Final 

(Adjusted Base case)

Annual

DV

24-hour

DV

Annual

DV

24-hour

DV

12.35 31.37 11.58 29.70

Analytical Baseline with Attainment of 15/35

No additional controls were needed to attain the current standard of 15/35 μg/m3for Wayne County in the 

baseline in the proposal RIA or final RIA.

2020 Baseline

Proposal (Baseline) Final (Analytical Baseline)

Annual

DV

24-hour

DV Annual DV 24-hour DV

12.35 31.37 11.58 29.70

 

1

The hybrid methodology cost estimates increased between the proposal RIA and the final RIA largely because a 

large amount of emissions reductions were needed from one county with a low amount of known controls. 
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Attainment of Standard of 12 ug/m3

In the proposal RIA, known controls were applied in Wayne County to reduce the annual design value to attain 

the revised standard. The controls applied reduced emissions, which resulted in a projected design value of 

11.82 ug/m3. The DV was reduced to 11.82 ug/m3and not precisely to 12 ug/m3because of the manner in

which known controls are applied to emissions sources -- each specific control technology achieves a specific 

level of emission reductions. As a result, a control technology may achieve more emissions reductions than 

the minimum air quality improvement needed to attain the standard. In the final RIA, no known controls were 

needed to achieve the standard of 12 ug/m3because the projected “on-the-books” programs achieved that 

level.

Annual Standard of 12 ug/m3

Proposal DV Final DV

11.82 11.58

Riverside County, CA

2020 Base Case with “On-the-Books” Controls

In both the proposal RIA and the final RIA, Riverside County, California exceeded the current annual and 24-

hour standards of 15/35 ug/m3. The DVs were higher in the proposal RIA than for the final RIA largely because 

the 2005-2009 ambient data used in the final RIA had lower starting DVs for air quality projection purposes 

than the 2003-2007 ambient data used in the proposal RIA. 

2020 Base Case

Proposal (Base case)

Final 

(Adjusted Base case)

Annual

DV

24-hour

DV

Annual

DV

24-hour

DV

16.30 46.57 15.55 38.3
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Analytical Baseline with Attainment of 15/35

Known controls and emissions reductions beyond known controls were applied to reduce the ambient DVs to 

attain the current standards of 15/35 ug/m3. When reducing emissions to achieve the 24-hour DV, the annual 

DV is simultaneously reduced and can be lower than the current annual standard of 15 ug/m3. In the case of 

Riverside County, the 24-hour DV was the controlling DV in attaining the current standards of 15/35 ug/m3so 

that the emissions reductions required to meet the 24-hour standard will result in reductions in the annual DV

to below the annual standard of 15 μg/m3. As a result, the annual PM2.5 increment needed to attain 

alternative standards will not be relative to an annual DV of 15 μg/m3, rather, the increment will vary by 

county based on the annual DV in that county that resulted from applying emissions controls to meet the 35 

μg/m3 24-hour standard.

When we analyzed the costs and benefits of the control strategy designed to achieve the selected standard of 

12 ug/m3, the air quality increment needed was greater in the final RIA than it was in the proposal RIA by 1.5 

ug/m

3

(14.58 – 13.08 ug/m3). The reasons for this are grounded in the different decisions made in preparing

the control strategy design between the proposal RIA and final RIA. In addition, in the final RIA, the 24-hour

standard was attained more effectively and had less impact on annual DVs because of episodic, direct PM2.5 

reductions on residential wood combustion; in the proposal RIA, the daily standard was attained less 

effectively because we pursued year-around NOx and SO2 reductions that necessitated more emissions 

reductions and had more impact on the annual DVs (See table below with 13.08 annual DV for proposal RIA 

versus 14.58 annual DV for final RIA). 

2020 Baseline

Proposal (Baseline) Final (Analytical Baseline)

Annual

DV

24-hour

DV Annual DV 24-hour DV

13.08 35.4 14.58 35.3

Attainment of 12 ug/m3

To attain the selected standard of 12ug/m3, emissions reductions beyond known controls were applied to 

reduce the annual DVs, which resulted in ambient DVs that just attained the standard. Note that when 

applying known controls, a control technology may achieve more emissions reductions than the minimum air 

quality improvement needed to attain the standard. When applying “unknown” controls, the minimum 

emissions reductions needed are those achieved to attain the standard. 

Change in Annual DV in Proposal RIA = 13.08 ug/m3- 12.04 ug/m3= 1.04 ug/m

3

of air quality change

Change in Annual DV in Final RIA = 14.58 ug/m3- 12.04 ug/m3= 2.54 ug/m3of air quality change

The benefits are estimated based on the incremental air quality change between the baseline and attainment 

of the selected standard of 12ug/m3. The increments of air quality change, noted above, between the 

proposal RIA and the final RIA result in larger estimated benefits for Riverside County in the final RIA.